Federal Debt Increases By 75 Billion State Debt Remains Elevated

Germany's Public Debt Continues to Rise

Federal Debt Increases by €75 Billion, State Debt Remains Elevated

Eurozone Debt Reaches 90% of GDP in 2023

BERLIN, Germany - Germany's public debt has grown significantly in recent years, with the federal government's debt increasing by €75 billion during 2023. The country's state governments also continue to face high levels of debt.

According to the latest data from the Federal Statistical Office, Germany's federal debt now stands at approximately €1.6 trillion. This represents an increase of more than 75 billion euros compared to the end of 2022. The increase in federal debt is primarily due to increased government spending on measures to mitigate the economic impact of the COVID-19 pandemic and the Ukraine war.

The debt of Germany's 16 states has also remained elevated. At the end of 2023, the combined debt of the states stood at around €570 billion, an increase of €10 billion compared to the previous year. The highest level of state debt is held by Bavaria, followed by North Rhine-Westphalia and Baden-Württemberg.

Germany is not alone in facing high levels of public debt. In the Eurozone, the average debt-to-GDP ratio reached 90% at the end of 2023. This is significantly higher than the 60% limit set by the European Union's Stability and Growth Pact. The increase in Eurozone debt is primarily due to the impact of the COVID-19 pandemic, which led to increased government borrowing to support businesses and households.

Economists caution that high levels of public debt can have a negative impact on a country's long-term economic growth. They argue that governments need to implement measures to reduce debt levels to ensure fiscal sustainability.